Correlation Between Changshu Tongrun and Fujian Newland
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By analyzing existing cross correlation between Changshu Tongrun Auto and Fujian Newland Computer, you can compare the effects of market volatilities on Changshu Tongrun and Fujian Newland and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Changshu Tongrun with a short position of Fujian Newland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Changshu Tongrun and Fujian Newland.
Diversification Opportunities for Changshu Tongrun and Fujian Newland
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Changshu and Fujian is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Changshu Tongrun Auto and Fujian Newland Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fujian Newland Computer and Changshu Tongrun is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Changshu Tongrun Auto are associated (or correlated) with Fujian Newland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fujian Newland Computer has no effect on the direction of Changshu Tongrun i.e., Changshu Tongrun and Fujian Newland go up and down completely randomly.
Pair Corralation between Changshu Tongrun and Fujian Newland
Assuming the 90 days trading horizon Changshu Tongrun is expected to generate 3.05 times less return on investment than Fujian Newland. In addition to that, Changshu Tongrun is 1.16 times more volatile than Fujian Newland Computer. It trades about 0.07 of its total potential returns per unit of risk. Fujian Newland Computer is currently generating about 0.25 per unit of volatility. If you would invest 1,649 in Fujian Newland Computer on August 25, 2024 and sell it today you would earn a total of 356.00 from holding Fujian Newland Computer or generate 21.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Changshu Tongrun Auto vs. Fujian Newland Computer
Performance |
| Timeline |
| Changshu Tongrun Auto |
| Fujian Newland Computer |
Changshu Tongrun and Fujian Newland Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Changshu Tongrun and Fujian Newland
The main advantage of trading using opposite Changshu Tongrun and Fujian Newland positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Changshu Tongrun position performs unexpectedly, Fujian Newland can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Fujian Newland will offset losses from the drop in Fujian Newland's long position.| Changshu Tongrun vs. Crown Advanced Material | Changshu Tongrun vs. Ningbo Fangzheng Automobile | Changshu Tongrun vs. Dongfeng Automobile Co | Changshu Tongrun vs. Anhui Jianghuai Automobile |
| Fujian Newland vs. Ming Yang Smart | Fujian Newland vs. 159005 | Fujian Newland vs. Loctek Ergonomic Technology | Fujian Newland vs. Xiamen East Asia |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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